Allen West Talks With CDNews on Debt, the Economy and Foreign Policy

Tuesday afternoon, I had the opportunity to spend twenty minutes with Congressman Allen West (R FL-22) and ask him about the outcome of the debt-limit negotiations, the current state of the economy and U.S. foreign policy. Once the pleasantries were exchanged, we got right to the questions.

Rich: Moody’s cut the U.S. economic outlook for 2011 and people are still struggling to find jobs. What would you like to see done on to fix the economy?

Rep. West: I think One of the things that has to happen is the government has to set the conditions to incentivize long-term, sustainable economic growth in America. When we continue to talk about bigger government and tax hikes, that’s not how we do it. I think when you look at the corporate tax rate in America, which is the second highest in the world, very simply let’s take that tax rate and cut it down to 20-21% and remove all the loopholes, strategies and subsidies and give our corporations and businesses a competitive tax rate. For the individual tax rate, since many businesses operate as sub chapter S corporations, let’s flatten that out to somewhere between 13% and 16% and only have two deductions: the child tax credit and the mortgage interest deduction.

For clarification, I repeated what I’d heard and got even more insight into how the Congressman would kick start the economy. He mentioned that not only would he be in favor of the lower corporate tax rate, but would favor making it retroactive to January 1st of 2011. As Rep. West put it, it would allow companies to recalculate their liabilities and realize additional assets that could allow them to invest, expand and hire.

Rep. West also mentioned the repeal of Sarbanes-Oxley, the set of financial regulations intended to prevent market losses like those experienced due to the Enron scandal. Unfortunately, Sarbanes-Oxley is expensive to implement and lacks any real or perceived benefits. It has done little more than to burden American companies with complex regulations that make it difficult to compete in the global economy.

Stressing that the “Keynesian model just doesn’t work” Congressman West mentioned that instead of more “pie-in-the-sky gimmicks” like stimulus spending, we should be looking at real plans like the new legislation he has in the House Ways and Means Committee – H.R. 1663 is titled ”The Small Business Encouragement Act” which, according to the Republican Study Committee, would:

The bill would amend the Internal Revenue Code to allow small businesses who hire an unemployed American, a work opportunity tax credit, saving employers up to $12,000 a year per hire in some areas of the country. To qualify, small businesses must have gross receipts in the preceding taxable year not exceeding $20 million, or they must employ less than 100 full time employees. The tax credit will double for employers hiring unemployed Americans in counties with an unemployment rate that is higher than the national average, which is currently just above 9 percent.

In the RSC blog post Rep. West was quoted as saying, “The Small Business Encouragement Act is a simple, effective solution to putting people back to work by encouraging the very backbone of our economy, the small businesses.”